Author: The New York Times

It’s not just nickel and dime bags anymore: Marijuana is getting some respect as legal sales take off.

This week two marijuana analysis and investment firms released a summary of a report that appeared to confirm that the industry has become a gold rush. National legal sales of cannabis grew to $5.4 billion in 2015, up from $4.6 billion in 2014, according to the firms, the ArcView Group, based in San Francisco, and New Frontier, based in Washington.

Demand is expected to remain strong this year, with a forecast of $6.7 billion in legal sales, the report said.

The promises and headwinds of the industry are potentially far-reaching and attracting notice on Wall Street. As more states legalize marijuana sales, analysts are weighing the stock market benefits of new businesses as cannabis goes corporate. Funds are considering the ethics of investing in marijuana. Parents are even debating whether to allow their children to buy the stocks.

And say goodbye to heat lamps in the closet and sandwich baggies. Lucrative legal side businesses are spinning off, like the climate systems for growers built by a company in Boulder, Colorado, and the FunkSac odor-proof and child-resistant marijuana bags produced in Denver.

“There is still a certain stigma around it,” said Brandy Keen, a co-founder of Surna, which makes technology for indoor cultivation. “This is an industry that came out of the basement. It grew out of closets and basements and hidden facilities in cinder-block buildings.”

Nonmedicinal adult use accounted for $998 million of the total sales in 2015, up from $351 million in 2014, according to the ArcView/New Frontier report summary. The estimates are based partly on state tax receipts and data on medical and recreational sales.

The report summary said that by 2020, legal market sales were forecast to be $21.8 billion.

The summary, released before a full report scheduled for the end of February, was one of the latest by market analysts to scrutinize the emerging marijuana industry. Merrill Lynch said in a report cited by Philly.com in December that it expected the cannabis market and associated testing technologies to grow if legalized.

GreenWave Advisors said in its latest annual report in November that it estimated revenues of $4.8 billion …(Continued on next page)

A Washingtonian, who asked to remain anonymous, got a text message Wednesday from a baker asking if he needed anything before the snow hit. “I’m making deliveries tomorrow,” the message said. “If you know anyone who needs treats before the snow storm hits!”

It included a picture of cookies, brownies — and the hint that they were filled with marijuana.

Marijuana laws in Washington were eased last year, and now some residents are adding the substance to their list of snowstorm provisions.
Some enterprising business owners are using the weather as a selling point.

“When I thought of the things I would need if I was going to be stuck in the house, I was like, ‘food, water, Netflix and weed,’ ” said the graduate student who got the baker’s text message.

He ordered a few edibles and got his delivery on Thursday.

Kenesha Hughes, a 29-year-old bartender in the Foggy Bottom neighborhood, said she planned to spend time during the storm painting, doing puzzles and listening to music.

“We also have herbal remedies as well,” she said. “But hey! It’s legal in D.C., so I can do that in my house now.”

Joaquín Guzmán Loera, the Mexican drug lord known as El Chapo, started out in business not long after turning 6, selling oranges and soft drinks. By 15, he said in an interview conducted in a jungle clearing by actor and director Sean Penn for Rolling Stone magazine, he had begun to grow marijuana and poppies because there was no other way for his impoverished family to survive.

Mexican drug lord Joaquin “El Chapo” Guzman, right, is escorted by soldiers and marines to a waiting helicopter, at a federal hangar in Mexico City, Friday, Jan. 8, 2016. The world’s most wanted drug lord was recaptured by Mexican marines Friday, six months after he fled through a tunnel from a maximum security prison in an escape that deeply embarrassed the government and strained ties with the United States.(AP Photo/Marco Ugarte)

Now, unapologetically, he said: “I supply more heroin, methamphetamine, cocaine and marijuana than anybody else in the world. I have a fleet of submarines, airplanes, trucks and boats.”

Although his fortune, estimated at $1 billion, has come with a trail of blood, he does not consider himself a violent man. “Look, all I do is defend myself, nothing more,” he told Penn. “But do I start trouble? Never.”

The seven hours Guzmán spent with Penn, and follow-up interviews by phone and video, which began in October while he was on the run, marked another surreal turn in his long-running effort to evade Mexican and U.S. authorities. Guzmán, who was one of the world’s most wanted fugitives and had twice escaped jail, was captured in his home state of Sinaloa in northwest Mexico on Friday after a gunbattle with the authorities.

Guzmán’s comments also marked a stark admission that he had operated a drug empire. Interviewed by a group of reporters in 1993 after a previous arrest, he denied that he had engaged in drug dealing. “I’m a farmer,” he said, listing his produce as corn and beans. He denied that he had used weapons or had significant funds.

The interview with Penn, believed to be the first Guzmán had given in decades, was published online Saturday night, along with a video portion of the interview.

The interviews were held in a jungle clearing atop a mountain at an undisclosed location in Mexico. Surrounded by more than 100 cartel troops and wearing a silk shirt and pressed black jeans, Guzmán sat down to dinner with Penn and Kate del Castillo, a Mexican actress who once played a drug kingpin in the soap opera “La Reina del Sur,” according to Rolling Stone.

Even though Mexican troops attacked his hideout in the days after the meeting, necessitating a narrow escape, Guzmán continued the interview by BlackBerry Messenger and in a video delivered by courier to the pair later.

The story provides new details on his dramatic escape from prison last summer, when he disappeared through a hole in his shower into a mile-long tunnel that some engineers estimated took more than a year and at least $1 million to build. The engineers, Penn wrote, had been flown to Germany for specialized training. A motorcycle on rails inside the tunnel had been modified to run in the low-oxygen environment, deep underground.

Penn’s account is likely to deepen the concern among the Mexican authorities already embarrassed by Guzmán’s multiple escapes, the months required to find him again and his status for some as something of a folk hero. Penn described being waved through a military checkpoint on his way to meet Guzmán, which Penn suggested was because the soldiers recognized Guzmán’s son. Penn said he was also told, during a leg of the journey taken in a small plane equipped with a scrambling device for ground radar only, that the cartel was informed by an insider when the military deployed a high-altitude surveillance plane that might have spotted their movements.

In the end, the Mexican authorities said Friday night that Guzmán had been caught partly because he had been planning a movie about his life and had contacted actors and producers, which had helped the authorities to track him down. Penn’s story says that Guzmán, inundated with Hollywood offers while in prison, had indeed elected to make his own movie. Del Castillo, whom he contacted through his lawyer after she posted supportive messages on Twitter, was the only person he trusted to shepherd the project, according to the story. Penn heard about the connection with del Castillo through a mutual acquaintance and asked if he might do an interview.

It is not clear whether the contacts described in the story were the ones that led to Guzmán’s arrest. Penn wrote that he had gone to great lengths to maintain security while arranging to meet Guzmán. He described labeling cheap “burner” phones, “one per contact, one per day, destroy, burn, buy, balancing levels of encryption, mirroring through Blackphones, anonymous email addresses, unsent messages accessed in draft form.” Nevertheless, he wrote, “There is no question in my mind but that DEA and the Mexican government are tracking our movements,” referring to the U.S. Drug Enforcement Administration.

A Mexican government official, speaking on condition of anonymity to describe confidential matters, said the authorities were aware of the meeting with Penn.

Penn and Guzmán spoke for seven hours, the story reports, at a compound amid dense jungle. Guzman does not speak English, and the interview was conducted in Spanish through translators.

It was not immediately clear what the ethical and legal considerations of the article might be. In a disclosure that ran with the story, Rolling Stone said that it had changed some names and withheld some locations. An understanding was reached with Guzmán, it said, that the story would be submitted for his approval, but he did not request any changes. The magazine declined to comment further Saturday.

The topics of conversation turned in unexpected directions. At one stage, Penn brought up Donald Trump, the Republican presidential candidate; there were some reports that Guzmán had put a $100 million bounty on Trump after he made comments offensive to Mexicans. “Ah! Mi amigo!” Guzmán responded.

Guzmán asked Penn whether people in the United States were interested in him and laughed when Penn told him that the Fusion channel was repeating a documentary on him, “Chasing El Chapo.”

In a wider-ranging interview, for which Penn submitted questions that were put to Guzmán on video by one of his associates, he detailed his childhood and said he had tried drugs during his life but had never been an addict and had not touched them for 20 years. He said that he was happy to be free and that the pressure of evading the authorities was normal for him.

Pushed on the morality of his business, he said it was a reality “that drugs destroy. Unfortunately, as I said, where I grew up there was no other way and there still isn’t a way to survive, no way to work in our economy to be able to make a living.” If he disappeared, he said, it would make no difference to the drug business.

Asked about the violence attached to his work, he said in part it happened “because already some people already grow up with problems, and there is some envy and they have information against someone else. That is what creates violence.”

Guzmán, Penn said, was familiar with the final days of Pablo Escobar, the Colombian drug boss who had previously been the world’s most notorious and who died in a shootout with the authorities. How, he asked, did Guzmán see his last days? “I know one day I will die,” he said. “I hope it’s of natural causes.”

The front of a Columbia Care medical marijuana dispensary in the East Village neighborhood of New York, Jan. 5, 2016. New York (Benjamin Norman/The New York Times)

ALBANY, N.Y. — New York joined the ranks of nearly half the states on Thursday in allowing the use of medical marijuana with the opening of eight dispensaries statewide, serving a variety of tinctures, concentrates, vapors and other forms of the drug.

How many patients actually received medicine from those dispensaries, however, was uncertain; several locations around the state had customers who entered, but it was not clear if any actually bought the drug, or were qualified to do so under the state’s strict guidelines. On Thursday, officials at the state’s Department of Health said that only 51 patients had been certified for the program thus far, although that process only began on Dec. 23 and requires the approval of a physician who has registered with the state.

Still, several facilities formally marked their openings on Thursday morning, including one on East 14th Street in Manhattan, a sleek space adorned with security cameras, and sandwiched between a health care provider and a falafel establishment. The site, run by a company called Columbia Care, which also operates facilities in Arizona and Washington, D.C., attracted several potential customers, including one man who showed reporters his purple and white New York state medical marijuana card.

“I wanted to find out the pricing, I wanted to find out the availability, I wanted to find out what the deal with it was,” said the man, 53, who declined to give his name for privacy reasons but said he suffered from neuropathy. “I spoke with the pharmacist, spoke with the people. They were as excited about seeing me as I was excited about seeing them.”

Medical use packaging for marijuana at Etain dispensary — a vape pen, drops and oral spray — that customers will be able to purchase, in Albany, N.Y., Jan. 7, 2016. New York State on Thursday joined the ranks of nearly half the states, allowing the use of medical marijuana. Eight dispensaries have opened statewide. (Brett Carlsen/The New York Times)

A dispensary in White Plains was scheduled to open on Thursday, as well as two in the Buffalo area and two in the Finger Lakes region, including near Syracuse. One company, Etain, opened its doors in Kingston around 8 a.m., and then opened a second dispensary in Albany on Thursday afternoon. Others are also expected to open in coming weeks, as the program ramps up.

Permitted under a 2014 law signed by Gov. Andrew M. Cuomo, New York’s entry into the medical marijuana marketplace comes after years of lobbying by lawmakers on behalf of patients, including children, for whom the drug is a palliative to debilitating illnesses. Yet even after the law’s adoption, some supporters of the concept criticized its stringent regulations, including that only a limited number of conditions qualify for medical use of marijuana and that it is sold in only 20 locations statewide. The drug also may not be smoked in New York, a stipulation of Cuomo’s approval, and must be processed into other forms by the companies that grow it.

All of which left even medical marijuana’s most ardent supporters sounding somewhat bittersweet at the prospect of Thursday’s soft opening.

“I think the glass is three-fourths full, maybe two-thirds full, and that is that it is going to benefit a lot of very seriously ill people,” said Assemblyman Richard N. Gottfried, D-Manhattan, who first introduced a bill to legalize medical marijuana in the mid-1990s. “But I think we can do better.”

A late adopter to a trend that is now 20 years old, New York, in allowing medical marijuana, joins states as varied as conservative Montana and liberal California, which in 1996 became the first state to legalize the drug’s use as medicine. Alaska, Colorado, Oregon, Washington and the District of Columbia also allow the drug’s recreational use.

Still, because New York is the home of the so-called Rockefeller drug laws, which set a punitive tone regarding drug use and users in the 1970s, even a measured acceptance of marijuana here seemed significant to longtime advocates of relaxing harsh penalties for drug use.

“What makes it important is the prominence of New York City — nationally and internationally — and the significance of opening up legal medical marijuana outlets here,” said Ethan Nadelmann, the executive director of the Drug Policy Alliance, which lobbies for changes in national drug policy. He said New York had been “a laggard” on medical marijuana.

Cuomo, a Democrat, brokered the deal to allow medical marijuana at the end of the 2014 legislative session, but did so with a decided emphasis on security, asking for a provision that would allow the state to “pull the plug” on it at any time if public health or safety became threatened by the drug, which is still considered illegal by the federal government.

Also included in the list of approved ailments is amyotrophic lateral sclerosis, commonly known as Lou Gehrig’s disease. Hillary Peckham, the 24-year-old chief operating officer of Etain, said she opened the business with her mother, Amy, and her sister, Keeley, the company’s horticulturist, after the family’s matriarch, Frances Keeffe, died from ALS.

Etain was selected by the state in July as one of five groups to distribute the drug, and was given six months by the state to open. Hillary Peckham said they had put the final touches on one of the sites they opened on Thursday, in an industrial area of north Albany.

The freshly painted dispensary had no signs yet, but offered a clean, sparsely furnished waiting room to obtain the drug. Qualified patients enter a rear area to consult with a physician, who then delivers one of 10 approved brands that include sprays, tinctures and vaporizers similar to e-cigarettes.

Peckham estimated that an average patient might spend $300 to $1,200 a month on marijuana as medicine. And though the company had yet to make a sale on Thursday afternoon, she said she was excited to start business.

“I always wanted to make an impact on people’s lives,” Peckham said. “But I never thought it would be this.”

A deputy sheriff who works for an anti-narcotics task force in Northern California found himself swept up in a $2 million marijuana arrest in Pennsylvania last week. The authorities are now trying to determine if any of the cases he worked on have been tainted.

According to a criminal complaint, Christopher M. Heath, the deputy, and another man, Tyler Long, 31, drove across the country to deliver more than 122 packages of marijuana to a person in West Manheim Township, Pa.

But investigators had been tipped off, and they stopped the car at around midnight on Dec. 28. The pair were arrested, along with a third man in another vehicle, identified as Ryan J. Falsone, 27.

In addition to the marijuana and $11,000 in cash, the authorities found Deputy Heath’s badge and his duty firearm, David Sunday, the York County chief deputy prosecutor, said in a telephone interview on Tuesday.

The Pennsylvania officers did not know before the arrest that Deputy Heath, 37, worked in law enforcement, he said.

Details about the drug bust were announced by Tom Kearney, the York County district attorney, on Monday and reported in local newspapers.

Photo

An undated photo of Christopher M. Heath. (Photo courtesy of York County Prison)

“One has to be both saddened and angry when you hear of something like this,” Mr. Kearney said, according to The Evening Sun of Hanover. “The work that is done by the task force and police officers in general is very dangerous work, and it is made more dangerous by the fact that occasionally there is a bad apple in the barrel.”

The three men were arrested on felony drug charges and each posted $1 million bail, Mr. Sunday said.

Mr. Sunday said the marijuana packages altogether weighed more than 240 pounds and had a street value of more than $2 million.

The arrest means that authorities are now reviewing drug cases in at least two counties in Northern California to see whether they have been compromised.

As part of the Yuba County Sheriff’s Department, Deputy Heath has worked on a task force known as NET-5, which targets illegal drug use, possession, manufacturing and sales. He worked for three years on the task force, which also serves Sutter County, investigating crimes and serving as a witness, including in at least one major federal case.

The Appeal-Democrat newspaper quoted the unit’s commander, Martin Horan, as saying that he had led at least 62 criminal cases, many of them related to marijuana.

The district attorney in Yuba County, Patrick McGrath, said he is now reviewing all the cases in which Deputy Heath had an investigative role to see if they were still viable.

“If Heath’s work was witnessed or can be otherwise credibly covered by the testimony of another investigator, the case may not be significantly impacted,” he said in an emailed statement. “In other situations, the case may be tainted to such a degree that we cannot proceed and the case will be dismissed.”

The Sutter County district attorney, Amanda Hopper, could not immediately be reached for comment.

The paper reported that the deputy had been placed on leave but would continue to receive his salary during the administrative investigation.

NEW YORK — It wafts down the pavement, an unmistakable odor more Haight-Ashbury than New York — the tang of marijuana smoke in the city’s streets. If the smell (and the lightheadedness a passer-by may feel) is anything to judge by, lighting up and strolling around seems increasingly common in pockets of Brooklyn, on side streets in Manhattan and in other public spaces.

A woman smokes marijuana in the Williamsburg neighborhood of New York, Dec. 12, 2015. Smokers say their courage to smoke outdoors comes from laws that have legalized the recreational use of marijuana in parts of the country, though smoking marijuana in public in New York remains an arrestable offense. (Hilary Swift/The New York Times)

Street smokers say they are emboldened by laws that have legalized the recreational use of marijuana in other parts of the country and by the relatively low-key comments by New York’s leaders, including the police commissioner, about the drug.

Interviews with people who said they had smoked marijuana in public yielded a general sentiment that they felt much more secure doing so today than they would have not long ago.

Still, in New York, smoking marijuana in public remains an arresting offense, though the policy for possessing, but not lighting, a small amount of marijuana has changed with officers issuing summonses instead of making arrests. Some people say the scent is merely another whiff of gentrification as outsiders from places with less prudish approaches to marijuana colonize hip neighborhoods and import their own social mores.

As he walked with his cousin past Gramercy Park in Manhattan on a recent afternoon, John Jay, 25, inhaled deeply from a rolled paper joint and explained how attitudes had shifted. “Even in high school, you would kind of look left and right — ‘Are you good to roll?’” he said. “‘Are you OK to spark?’ We’d find a spot to hide.”

Now, Jay, who works in catering, said he smoked in public with a sense of impunity. “Here in New York City, because we know it’s legal in other states, we kind of have that feeling the legalization of marijuana is spreading across the nation, and it’s going to come regardless,” he said.

Recreational use of marijuana has been legalized in Alaska, Colorado, Oregon, Washington state and Washington, D.C. In New York State, the use of marijuana for certain medical conditions was made legal last year, though dispensaries have not yet opened. In New York City last year, Mayor Bill de Blasio and Police Commissioner William J. Bratton announced that the police would no longer arrest people possessing 25 grams of marijuana or less and would use their discretion in issuing a ticket for the offense.

During a news conference in October, Bratton spoke about how he had run into a young woman smoking marijuana in the financial district while on his way to a morning appointment and had let her off with a warning. “All of a sudden, there it is, that smell,” he told reporters. “What the hell — 8:30 on Wall Street?”

Despite anecdotal evidence, and a telltale odor in the air, quantifying whether street smoking is more prevalent than before is challenging. Arrests for smoking marijuana are included as part of the Police Department’s database of arrests for possessing the drug and are not a separate category.

One morning in September, I logged on to the website of HelloMD, a medical startup that promises to connect patients with doctors instantly over the Internet. I filled out my personal details, explained my ailment — I often get heartburn — and entered in my credit card number to cover the $50 consultation fee.

Within 10 minutes, a pediatrician based near Washington, D.C., who is licensed to practice medicine in my home state of California popped up on my screen. She appeared to be sitting in her home — there were a few teddy bears and ceramic figurines on a cabinet behind her — and she wore a red shirt, not the traditional white coat.

The doctor asked about my medical history, current symptoms and familiarity with certain medicines. The interview lasted about three minutes, after which she announced what everyone who visits HelloMD expects to hear: According to her diagnosis, my heartburn made me a candidate for medical marijuana, which has been legal in California since 1996.

HelloMD is at the forefront of a new trend in Silicon Valley: the cannabis tech startup. As marijuana laws are being loosened across the country, entrepreneurs and investors are creating new businesses to cash in on what they see as an emerging bonanza. Like startups in other industries, these firms are trying to use technology to bring speed and efficiency to what has long been a face-to-face, pen-and-paper market. In the process, they are also trying to alter mainstream perceptions of the marijuana industry, shedding the ganja and Rasta imagery to cultivate a wider audience.

“What we see is moms, dads, professionals, old people, everyone wanting access to cannabis,” said Mark Hadfield, founder of HelloMD. “The old type of experience — go to a crummy dispensary, wait in line — was not going to appeal to the market that we were after, which is everyday Americans, a market that, by the way, is much larger than the old market of — I don’t want to call them stoners, but let’s say, ‘recreationally minded young people.’”

People in the marijuana industry have lately taken to saying that legal marijuana is the next Internet, an untrammeled new market opportunity that is just waiting for its own big brands, the Google and Facebook of pot. But many businesses are also finding that, in an environment of only partial legality, not everything in the marijuana business is smooth sailing.

Proponents for legalization expect a handful of states to vote on ballot measures to legalize the recreational use of marijuana in the 2016 election. The biggest prize is California, where a wealthy coalition of advocates, including Sean Parker, co-founder of Napster and the former president of Facebook, is pushing for recreational legalization.

“California is the biggest domino,” said Justin Hartfield, founder and chief executive of Weedmaps, a kind of Yelp for marijuana dispensaries, who is also backing the California initiative. “Once California goes legal, very shortly after we’ll have a majority of states where adult-use is legal.”

The ArcView Group, a company that connects investors to cannabis businesses, estimates the U.S. legal cannabis industry generated $2.4 billion in sales in 2014, up 74 percent from 2013. Legalization will lead to continued growth of at least double-digit percentage points for the rest of the decade, according to Troy Dayton, the chief executive of the ArcView Group.

“This is already the fastest-growing industry in America, and when these new markets come online, the impact will be huge,” Dayton said.

And when millions of new customers flood into the marijuana business, tech companies will be lining up to offer them an easy way to find a hit. They’ve already made it pretty simple: After getting my prescription, I didn’t have to do much more to get some drugs.

HelloMD emailed me a letter, a “medical recommendation” that is the technical equivalent of a medical marijuana prescription, stating that “this patient has been diagnosed with a serious medical condition, and that the medical use of marijuana is appropriate.” Using Weedmaps, I found a service that would deliver marijuana to my house. After uploading a picture of my driver’s license and the HelloMD letter to the dispensary, I was cleared to order from a voluminous online menu.

I chose a Shatter Tank, a $100 pen-shaped electronic cannabis-extract vaporizer (even when it comes to drugs, I choose the techie route). About an hour after placing my order, a young man who bore the faint smell of a joint rang my doorbell and handed me the package. The entire process was easier than ordering a pizza. I’ve since forgotten about my heartburn (which I really do have — though of course, it’s entirely possible that many HelloMD patients could be stretching the truth about their ailments).

HelloMD is not alone. On Wednesday, Meadow, a 1-year-old company that also makes it easy to get a prescription and order online, is announcing the introduction of software that will eventually let many businesses in the medical marijuana supply chain manage their operations digitally.

“As the laws change, what we’re trying to build is a seed-to-sale platform,” said David Hua, Meadow’s co-founder and chief executive, who shows that even a marijuana executive can’t resist the pull of Silicon Valley jargon. “We want to connect growers, distributors, dispensaries, patients and doctors, so that anyone in the business can streamline their operations.”

Meadow has received funding from Y Combinator, the technology incubator. “We’ve seen a spike in applications in the past year in companies that are doing stuff in cannabis,” said Justin Kan, a partner at the firm, who noted that Y Combinator recently invested in another cannabis-related company that has yet to be announced.

In April, Founders Fund, the venture capital firm co-founded by investor Peter Thiel, made a multimillion-dollar investment in Privateer Holdings, a Seattle company that manages several marijuana businesses. Among Privateer’s companies is Leafly, a site that offers news and reviews of various marijuana products, and Tilray, which researches and cultivates marijuana crops at a state-of-the-art grow facility in Canada.

Brendan Kennedy, one of Privateer’s founders and its chief executive, worked for years in Silicon Valley finance, and he began researching the cannabis business after chatting with a potential client.

“After looking into the industry, we quickly realized that this is no longer, and hasn’t been for years, a countercultural product,” Kennedy said. There was opportunity, he added, because “the brands that were out there tended to embrace the clichés of the industry.”

Privateer’s ultimate goal is to become something like the Anheuser-Busch InBev — or maybe even the Coca-Cola — of pot: The friendly, widely recognizable face of an everyday pastime.

But the reality of breaking into the marijuana business has not been easy. In 2012, Kennedy spent about half a year trying to raise money for the company. He eventually managed to get about $7 million, but it was largely from wealthy private individuals, not big funds. The company’s second fundraising round in April netted $75 million, making Privateer one of the best-funded startups in the business. But it is a mark of the tender sensibilities of investors toward marijuana that the largest investor in that round has declined to be named.

(Founders Fund did not lead the round but was willing to be named, though Geoff Lewis, the Founders partner who made the investment, declined an interview request.)

“Everything in this industry is harder,” Kennedy said. “Things that would be check-the-box items for any Silicon Valley technology company, like opening a bank account or hiring a marketing firm or finding a lawyer to represent you, becomes a three- or four-month project in this business.”

And because the federal government considers marijuana illegal, many cannabis companies are not allowed to write off business expenses on their tax returns. “Every other industry only pays taxes on their profits,” said AJ Gentile, the chief executive of the marijuana delivery company SpeedWeed, which serves the Los Angeles area. “I have to pay federal tax on gross revenue.”

SpeedWeed delivers about 200 orders a day and it is growing, but Gentile isn’t sure about the prospects of his business. “If you factor all these extra costs in, the margins become very small,” he said.

But legalization looms — and with it, Gentile and other entrepreneurs hope for a wave of new customers and investors, and a widespread cultural acceptance of weed.

COLUMBUS, Ohio — The good ole fashioned butt-kicking Ohio voters delivered to ResponsibleOhio last week won’t scare off pro-pot forces from trying again. No less than four marijuana groups are talking about or circulating petitions to get on the statewide ballot, some as early as next year.

Even ResponsibleOhio vows to return with another proposal to present to voters.

Jacob Wagner of LegalizeOhio2016, one of the four groups, said the defeat of Issue 3 cleared the decks for a cleaner, less controversial marijuana legalization plan. “We are very confident that we are that alternative plan,” he said.

In addition to LegalizeOhio2016 and ResponsibleOhio, a third entity received the green light in May to circulate petitions to legalize marijuana and hemp, and a group advocating medical pot is working to re-submit its petition language to the Ohio attorney general.

Lawmakers also are discussing pursuing a “measured” plan for phasing in a medical marijuana program — an acknowledgement that despite what happened Nov. 3, some aspects of legalization are overwhelmingly popular. “It was a real eye-opener for me to hear from so many people who said, ‘Yeah, I’m for medical marijuana,'” state Rep. Ryan Smith said last week.

But a limited legislative plan won’t likely appease those who want full-throttled marijuana legalization, so another ballot measure is likely — that is, if new hurdles in the path of a citizen-based initative can be overcome.

New hurdles

Getting on the statewide ballot in Ohio requires organization, time, money and boots on the ground to collect 306,000 valid voter signatures. It’s complicated, costly and, because of last week’s vote, potentially more difficult.

Issue 2 was a poison pill designed to thwart Issue 3 if it passed, but it also contained language that could impact the types of measures that end up on the Ohio ballot into the future. Issue 2 gave the five-member Ohio Ballot Board chaired by the secretary of state new powers to determine which citizen-initiated constitutional amendments would grant a monopoly, oligopoly, cartel or special economic benefit to a group. And depending on how those powers are applied, that could be a high bar.

Philip Wallach, a Brookings Institution fellow, says the ballot board now has wide discretion to define what constitutes a monopoly or provides special economic benefits to a group.

“If they decide yes, then voters must simultaneously pass two ballot issues to make the change: one to certify that they would like to override the anti-monopoly provision, and one for the substance of the amendment itself,” Wallach wrote in an article posted on the think tank’s website. “Presumably, the former would be difficult to overcome, meaning that the Ohio Ballot Board is now in a much stronger position to hinder passage of constitutional amendments it does not like.”

The Mexican Supreme Court opened the door to legalizing marijuana on Wednesday, delivering a pointed challenge to the nation’s strict substance abuse laws and adding its weight to the growing debate in Latin America over the costs and consequences of the war against drugs.

The vote by the court’s criminal chamber declared that individuals should have the right to grow and distribute marijuana for their personal use. While the ruling does not strike down current drug laws, it lays the groundwork for a wave of legal actions that could ultimately rewrite them, proponents of legalization say.

The decision reflects a changing dynamic in Mexico, where for decades the U.S.-backed anti-drug campaign has produced much upheaval but few lasting victories. Today, the flow of drugs to the United States continues, along with the political corruption it fuels in Mexico. The country, dispirited by the ceaseless campaign against traffickers, remains engulfed in violence.

“It’s the drama behind all of our efforts,” said Juan Francisco Torres Landa, a corporate lawyer who was one of the plaintiffs in the Supreme Court case.

The marijuana case has ignited a debate about the effectiveness of imprisoning drug users, in a country with some of the most conservative drug laws in Latin America. But across the region, a growing number of voices are questioning Washington’s strategy in the drug war. With little to show for tough-on-crime policies, the balance appears to be slowly shifting toward other approaches.

Uruguay enacted a law in 2013 to legalize marijuana, although the creation of a legal marijuana industry in the small country has unfolded slowly. Chile gathered its first harvest of medical marijuana this year. In Brazil, the Supreme Court recently debated the decriminalization of marijuana, cocaine and other drugs. And Bolivia allows traditional uses of coca, the plant used to make cocaine.

Many leaders in Latin America have called for a shift in policy, including President Juan Manuel Santos of Colombia. In May, his government ordered a halt to the aerial spraying of illegal coca fields, rejecting a major tool in the U.S.-backed anti-drug campaign because of concerns that the herbicide spray causes cancer.

Although Santos is one of Washington’s closest allies in the region, he has pointed out the incongruity of jailing poor farmers for growing marijuana while it is slowly being decriminalized in the United States.

“Every country in the world signed up to a treaty that prescribed a prohibitionist and criminalized approach to dealing with drugs that was one-sided,” said John Walsh, a senior associate at the Washington Office on Latin America, a human rights group. “That basic response doesn’t work anymore.”

Mexicans seeking a new strategy have also been struck by the situation.

“We are killing ourselves to stop the production of something that is heading to the U.S., where it’s legal,” said Armando Santacruz, another plaintiff in the case.

Still, few think that legalizing marijuana will significantly reduce drug violence or weaken the gangs. Although the rising production of higher-quality marijuana in the United States reduces demand for Mexican imports, experts say that Mexican gangs continue to account for an important percentage of the American supply.

As it stands, marijuana accounts for more than a fifth of revenues generated by cartels, around $1.5 billion a year, according to a 2010 report by the RAND Corp.

The one thing that could significantly affect the cartels’ marijuana business is legislation in the United States. As marijuana growing for commercial purposes in the U.S. expands, demand for Mexican marijuana could eventually dry up.

Pro-marijuana activists have scored a remarkable string of election wins in recent years even though the drug remains illegal under federal law.

Twenty-three states and the District of Columbia have passed laws permitting medical marijuana, and four states also allow recreational use by adults.

“In the long run, as the U.S. legalizes marijuana, Mexico is going to have a tough time competing with lawful American suppliers,” Walsh said. “That doesn’t mean they won’t have a business plan, it’s just that marijuana will be removed from it.” Marijuana is just one of many sources of income for the cartels, which smuggle narcotics across the border to the United States and run kidnapping and extortion rings at home. The criminal infrastructure will persist whether or not marijuana use is legal.

“The existing laws don’t reduce violence, either,” said Catalina Pérez Correa González, a law professor at CIDE, a university in Mexico City.

The legal ruling on Wednesday barely referred to the bloody backdrop of the drug war. Instead, Justice Arturo Zaldívar wrote an 88-page opinion based on principles of human rights, arguing that the state recognizes an individual’s autonomy to engage in recreational activities that do not harm others.

The number of marijuana users in Mexico is believed to be small. One 2011 drug-use survey estimated that 2 percent of Mexicans had smoked marijuana in the past year. Although that figure is probably low, it is less than the 7.5 percent of people in the United States who said in a 2013 survey that they had used marijuana in the previous month.

If Mexicans are allowed to grow and consume their own marijuana, casual users will not have to commit a crime to obtain it. Now, marijuana users are currently vulnerable to extortion by the police and are locked up by the thousands every year on charges of consumption and possession.

“There is an enormous institutional and social cost to enforcing the laws against marijuana,” said Pérez Correa, whose surveys of state and federal prisons suggest that 60 percent of the inmates sentenced for drug crimes were convicted in cases involving marijuana. “How many resources are being used up to reduce these low-impact crimes?”

The ruling Wednesday was the culmination of an effort to change the law by four members of a prominent Mexican anti-crime group, Mexico United Against Crime.

Torres Landa and Santacruz formed an alliance with two other people, called the Mexican Society for Responsible and Tolerant Consumption — the Spanish acronym is SMART.

Their group applied for a license from Mexico’s drug regulatory agency to use marijuana, but, as expected, was turned down. Their appeal of that decision eventually reached the Supreme Court.

Yet the ruling Wednesday applies only to their petition. For legal marijuana to become the law of the land, the justices in the court’s criminal chamber will have to rule the same way five times, or eight of the 11 members of the full court will have to vote in favor.

If the court decisions continue in that direction, they will be flying in the face of public opinion. Mexicans are so opposed to legalizing marijuana that a leading pollster told the SMART group not to bother with a survey, Santacruz recalled, or to limit it to young people.

Adalí Cadena Rosas, 20, a pharmacy worker in Mexico City, bemoaned the decision on Wednesday. “I mean, we already have so many drug addicts,” she said. “This is only going to make things worse.”

On the other hand, Carlos Canchola, 87, a retiree, rejoiced when he learned of the ruling.

“This is great news,” he said. “People like me will be able to acquire it for rheumatism.”

President Enrique Peña Nieto said his government would respect the Supreme Court’s decision, but his government, legislators and security and health officials all oppose legalization, as does the Roman Catholic Church.

But Santacruz is determined to change minds.

Invoking the specter of Mexico’s most notorious drug kingpin, Joaquín Guzmán Loera, known as El Chapo, he likes to remind people: “Bad regulation is better than whatever regulation El Chapo and the narcos can provide.”

At a Republican presidential debate being hosted in Colorado on Wednesday night, one issue is destined to come up: marijuana reform.

Colorado’s experiment with legalized marijuana remains a hot topic as the next election approaches, and for many Republicans, the subject requires a balancing act between wanting to protect individual and state rights without seeming to condone people getting high.

In that spirit, the Marijuana Policy Project, an advocacy group for the legal marijuana industry, has dusted off its scorecard of where the candidates stand on the issue.

Senator Rand Paul of Kentucky is expected to get the most cheers from the legalization crowd, as he gets an A-minus grade from the group because of his calls to decriminalize recreational use and his desire for states to decide their own marijuana laws.

A marijuana moment could also be a chance for former Gov. Mike Huckabee of Arkansas to stand out. He recently got an upgrade from the marijuana supporters for saying that the federal government should not interfere with state marijuana policies.

Donald J. Trump got mixed reviews from those who support legalization, as he was in favor of it in the 1990s but has since taken a more conservative view. Carly Fiorina gets a C-plus for supporting decriminalization and the rights of voters to make their decisions about marijuana policy, even though she is against it for recreational or medicinal purposes.

Ben Carson gets a D rating because he has promised to intensify the war on drugs and to have the federal government crack down on states that legalize marijuana. However, he is in favor of prescribing it for medical use in some cases.

Finally, Gov. Chris Christie of New Jersey gets a failing grade from advocates because he has vowed to crack down on marijuana, even in states that have legalized it. For Mr. Christie, the F is most likely a badge of honor.

“If you’re getting high in Colorado today, enjoy it,” he said this year. “As of January 2017, I will enforce the federal laws.”